French system of water management faces far-reaching reforms

The French system of water management, held in such high regard throughout the world, has come in for severe criticism in recent months.

Both the Court of Accounts and the General Planning Commission last year launched an attack on the public bodies responsible for the administration and implementation of French water policy. The six Water Agencies in the country’s six natural water basins have been accused of:

• lacking procedural and financial clarity;

• not ensuring compliance with quality standards;

• and inadequate implementation of the ‘polluter pays’ principle.

According to the Court of Accounts more than 5M people do not have access to water that conforms to EC drinking water quality standards while nearly half of all French rivers do not meet quality objectives.

On May 20 these criticisms, plus pressure from within her own ministry, compelled Voynet to tell the French Cabinet that the government needs to address: “water prices that are often perceived as determined arbitrarily, insufficient representation of users in basin committees, gaps in the implementation of the ‘polluter pays principle,’ and inadequacies in the application of the law.” (Le Monde May 21 1998)

To solve the problem, Voynet announced six objectives:

• the introduction of a new ‘Programming Law’ enabling Parliament to have more say in drawing up the Water Agencies’ five-year action programmes;

• the creation of a ‘High Council’ of public water organisations to oversee the fixing of water bills;

• the inclusion of more representatives of user associations and NGOs in the River Basin Committees;

• the reform of customer charges introduced under a law passed in 1964 (see box);

• the improvement of the application of the ‘polluter pays’ principle;

• and, finally, a greater effort to enforce regulations.

Despite the fact that the Water Agencies wield immense power coupled with an annual income of around FFr12.5Bn, they are at present largely independent of Parliamentary influence.

However, those who hoped to see the Water Agencies brought to book will have to wait. The Programming Law, if approved by Parliament, will not come into effect until 2002.

The creation of a ‘High Council’ of public water organisations is perhaps Voynet’s most innovative move. Joint-controlled by the Ministries of Environment, Finance and Consumption, the High Council will supervise water pricing in the municipalities.

Patrick Fevrier, assistant director of the Ministry of Environment’s water directorate, lists a number of examples of over-complexity in the pricing of water.

• The end of single charge billing in 1992 and the introduction of metering meant that user consumption decreased. However, overall spending remained at the same level, meaning that the price of water per m³ had to rise. This, of course, was difficult to explain, let alone justify to consumers.

• Confusion has arisen among users in coastal towns and other tourist areas where wastewater rates tend to be higher because of seasonal population fluctuations. Those who live in the area for only a small part of the year complain they are forced to pay for WwTPs they hardly ever use. The locals, on the other hand, feel they are having to pay to treat waste they do not create.

The problem is exacerbated by the fact that the section of a consumers’ bill that lists the local Water Agency charge – nearly 14% of the total price in 1997 – contains both a pollution charge and a resource charge.

The former is calculated per inhabitant and in proportion to the volume of water charged for in the rest of the bill. However, the resource charge is not calculated per inhabitant but calculated according to the amount of water in the region. This charge may not even be indicated on the bill itself.

“The reason is,” says Fevrier, “that if you need to put money aside to build a new STP, the cost is not linked to the level of consumption of water and must be shared by all users.”

Since the 1992 Water Act, private companies and local authorities have had to justify the price they set for the water they provide. But prices have risen by 60% since the Water Act became law and there has been much controversy over what basic rates cover. It will fall to the High Council to help solve such problems.

Many charges introduced in 1964 will be reformed in an attempt to make the billing system fairer. At present, French cities subsidise the countryside’s wastewater treatment programmes, while individuals must cover the cost of agricultural pollution.

However, attempts to simplify the tariff system may cause more problems warns Fevrier. “We can treat each cause of unfairness in isolation,” he says, “but if we decide to calculate new charges or to draw up new regulations to modify the balance between what is paid by users in rural communes and in urban areas we could create new difficulties.”

At present, people in villages with under 400 inhabitants do not pay any Water Agency charges, although they contribute to the National Water Supply Development Fund.

Many of these 30,000 villages and hamlets are not necessarily populated by rural people, but often by commuters. The cost of calculating Water Agency charges was deemed to be too high back in 1964. In order to manage water and other resources, however, small ‘communes’ are often grouped together and their affairs managed by a council.

As a result, where these groups – known as Local Water Authorities – include communes that are larger than 400, users in one commune can feel they are subsidising those in another.

This state of affairs has not yet been raised formally, but the Water Authorities wish to increase rural revenues, partly to raise the investments required under the ECUWWTD.

Fevrier feels that any attempt to include the smaller communes would meet with strong opposition, particularly from the agricultural lobby. “We’ll attempt to calculate how the system could be fairer,” he says, “but it will be politically difficult.”

An important part of Voynet’s scheme concerns the improvement of democratic representation in the River Basin Committees.

Indeed, fair representation has had a chequered history in these organisations, considering they were set up to act as guiding ‘Water Parliaments’ to each Water Agency.

According to Fevrier, industry holds sway in the River Basin Committees but only pays about 15% in pollution and resource protection charges to the Agencies. Voynet plans to increase the number of user associations, farmers and NGOs represented in the River Basin Committees.

Perhaps Voynet’s most difficult task is to improve the application of the ‘polluter pays’ principle in France. Nitrates and pesticides from intensive farming are acknowledged to be a chief source of pollution, but getting the farming lobby to accept the principle after 30 years of exemption has, says Fevrier, proved “painful.”

The impetus for recent attempts to bring farmers into line has been the European Nitrates and Pesticides Directives. Negotiations in 1993 led to farmers being offered subsidies and a five-year exemption from paying pollution tariffs. That compromise is scheduled to finish at the end of this year.

Farmers, of course, want to extend the compromise for another three years. The Ministry of the Environment admits that there will probably be some compromise at the end of the year.

The ‘polluter pays’ principle can work, says Fevrier. He points to French industry, which calculated that in the long term it was cheaper to take measures to reduce pollution rather than continue to pay charges.

The French river basin management system

The French system of water management by Water Agencies was introduced under the Water Law of 1964. The Water Agencies were run mainly by government representatives until the Decentralisation Act of 1984.

At the national level, a National Water Committee is consulted by the Water Agencies on national water policy trends and on drafts of legislative and regulatory texts. Chaired by a Member of Parliament, the National Water Committee is composed of representatives of the National Assembly and the Senate and of important institutions and national federations.

France’s six natural river basins are each managed by two bodies – the River Basin Committee and the Water Agency. The Ministry of the Environment supervises both. Each River Basin Committee acts as a ‘Water Parliament’ and is composed of between 60 and 115 users, elected representatives, specialists and state officials.

The Water Agencies are public bodies responsible for balancing economic development with respect for the environment by distributing aid and taxing users. A Water Agency’s sphere of influence covers all the surface water, groundwater and territorial seawaters relating to each of the river basins.

The power of the Water Agencies rests on two principles –

• Solidarity: everyone has to pay charges to the Water Agencies for use of water. Everyone benefits from aid from the Water Agencies for construction of infrastructure.

• Decentralisation: decision making power rests with the River Basin Committee and the Agency’s Board of Directors. Both the Chairman of the Water Agency’s Board of Directors and the Director of the Agency are government-appointed.

The Water Agencies make their charges either through the user’s water bill or directly, as in the case of farmers and industry.

The amount charged for industrial and agricultural pollution is based on the amount of pollution produced on an ordinary day in the month of maximum discharge. In such cases, the Water Agency carries out a strict survey to ascertain exactly how much water the farmer/company uses and how much pollution is produced.

Consumers who use private companies or local authorities to manage their drinking water and wastewater are charged by the Water Agencies in a section of the user’s water bill.

The water bill has three sections:

i. Charges for the provision and treatment of drinking water.

ii. Charges for sewage treatment.

The price in these two parts includes the cost of building infrastructure and its subsequent O&M.

iii. Charges for the Water Agencies (around 10% of the bill), the National Fund of the Development of the Conveyance of Water, and sometimes for the Waterways Fund.

Private management

The municipalities are responsible for drinking water supply, wastewater treatment, and stormwater treatment. Since the Decentralisation Law of 1984, the state only authorises abstraction and discharge permits.

The communes organise water management either alone (under the mayor and council) or as part of Local Water Communities (under a committee and a president).

Communes may either entrust water management to a private company or manage the supply and treatment of water themselves. The majority of communes pass responsibility to private companies within either delegated or mixed management contracts.

75% of French drinking water is supplied through delegated management. The proportion of sewerage services entrusted to private companies stands at over 35% and is increasing rapidly. Direct management of the supply by local authorities is now mainly found in small rural communes.